UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarterly Period ended September 30, 1996
Transition Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Transition Period from to
----- -----
Commission File Number
----------------------------------------
IDAHO CONSOLIDATED METALS CORP.
-------------------------------
(Exact Name of Small Business
Issuer as Specified in Its Charter)
British Columbia, Canada
--------------------------------
(State or other jurisdiction of
incorporation or organization)
82-0465571
--------------------------------
(I.R.S. Employer Identification No.)
504 Main Street, Suite 475
Post Office Box 1124
Lewiston, Idaho 83501
--------------------------------
(Address of Principal Executive Offices)
(208) 743-0914
--------------------------------
(Issuer's Telephone Number,
Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 6,854,208 as of
November 6, 1996.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
IDAHO CONSOLIDATED METAL CORP.
Form 10-QSB
For the Fiscal Quarter ended September 30, 1996
TABLE OF CONTENTS
PART I.FINANCIAL INFORMATION
Item 1. Financial Statements of the Company
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS OF THE COMPANY
--------------------------------------------
The following unaudited interim financial statements for the period
ending September 30, 1996, are included in response to item 1 and have
been compiled by Staley, Okada, Chandler & Scott, Chartered
Accountants.
The financial statements should be read in conjunction with
Management's Discussion and Analysis or Plan of Operations and other
financial information included elsewhere in this Form 10-QSB.
SCHEDULE A
IDAHO CONSOLIDATED
METALS CORP.
(An Exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
30 SEPTEMBER 1996
Unaudited - See Notice to Reader
U.S. Funds
STALEY, OKADA, CHANDLER & SCOTT
Chartered Accountants
NOTICE TO READER
We have compiled the interim balance sheet of Idaho
Consolidated Metals Corp. as at 30 September 1996 and the interim
statements of changes in shareholders' equity, operations and cash
flows for the nine months then ended from information provided by
management. We have not audited, reviewed or otherwise attempted to
verify the accuracy or completeness of such information. Readers are
cautioned that these statements may not be appropriate for their
purposes.
Burnaby, B.C. STALEY, OKADA, CHANDLER & SCOTT
12 November 1996 CHARTERED ACCOUNTANTS
Idaho Consolidated Metals Corp. Statement 1
(An Exploration Stage Company)
Interim Balance Sheet
As at 30 September
U.S. Funds
Unaudited - See Notice to Reader
September 30,
------------------------
1996 1995
----------- -----------
ASSETS
Current:
Cash $ 534,526 $ 10,224
Accounts receivable 85,000 94
Inventory 164,416 124,416
Prepaid expenses - 269
----------- -----------
783,942 135,003
Capital Assets:
Net of accumulated amortization 9,417 3,937
Resource Property Costs - Schedule 4,301,072 3,741,421
----------- -----------
$ 5,094,431 $ 3,880,361
=========== ===========
LIABILITIES
Current:
Bank loan $ 30,408 $ -
Accounts payable:
Related parties 78,519 88,911
Other 533,477 463,726
Current portion of notes payable 529,906 415,000
Share subscriptions payable - 340,200
----------- -----------
1,172,310 1,307,837
----------- -----------
Notes Payable 20,078 -
----------- -----------
Idaho Consolidated Metals Corp. Statement 1
(An Exploration Stage Company)
Interim Balance Sheet, Continued
As at 30 September
U.S. Funds
Unaudited - See Notice to Reader
September 30,
------------------------
1996 1995
----------- -----------
SHAREHOLDERS' EQUITY
Share Capital - Statement 2 $ 7,421,177 $ 5,095,447
Deficit - Accumulated during the
exploration stage - Statement 2 (3,466,549) (2,470,338)
Foreign Currency Translation
Adjustments - Statement 2 (52,585) (52,585)
----------- -----------
3,902,043 2,572,524
----------- -----------
$ 5,094,431 $ 3,880,361
=========== ===========
ON BEHALF OF THE BOARD:
--------------------------------,
Director
--------------------------------,
Director
- See Accompanying Notes -
Idaho Consolidated Metals Corp. Statement 2
Interim Statement of Changes in Shareholders' Equity
U.S. Funds
Unaudited - See Notice to Reader
Deficit
Accumulated Foreign
Common Shares During the Currency
---------------------- Exploration Translation
Shares Amount Stage Adjustment Total
--------- ----------- ----------- ----------- -----------
Balance - 31 December 1994 5,310,044 $ 4,298,476 $(1,794,488) $ (52,585) $ 2,451,403
Issuance of shares for
exercise of warrants
($2.23 per share) 30,000 66,900 - - 66,900
Private placement ($1.50
per share) 290,464 435,696 - - 435,696
Release of escrowed
shares for executive
compensation ($1.57 per
share) - 294,375 - - 294,375
Loss for the period -
Statement 3 - - (675,850) - (675,850)
--------- ----------- ----------- ----------- -----------
Balance - 30 September 1995 5,630,508 $ 5,095,447 $(2,470,338) $ (52,585) $ 2,572,524
========= =========== =========== =========== ===========
Balance - 31 December 1995 5,968,308 $ 5,602,147 $(2,645,366) $ (52,585) $ 2,904,196
Options exercised 30,000 39,520 - - 39,520
Private placement ($1.50
per share) 100,000 150,000 - - 150,000
Private placement ($1.75
per share) 755,900 1,322,825 - - 1,322,825
Finder's fee - (45,000) - - (45,000)
Release of escrowed
shares for executive
compensation ($1.28 to
$2.34 per share) - 351,685 - - 351,685
Loss for the period -
Statement 3 - - (821,183) - (821,183)
--------- ----------- ----------- ----------- -----------
Balance - 30 September 1996 6,854,208 $ 7,421,177 $(3,466,549) $ (52,585) $ 3,902,043
========= =========== =========== =========== ===========
- See Accompanying Notes -
Idaho Consolidated Metals Corp. Statement 3
Interim Statement of Operations
For the Nine Months Ended 30 September
U.S. Funds
Unaudited - See Notice to Reader
1996 1995
---------- ----------
Administrative Expenses:
Executive compensation $ 351,685 $ 294,375
Professional fees 142,786 140,791
Management fees and wages 116,448 64,413
Shareholder information 54,846 46,030
Office and general 42,904 32,358
Travel 33,712 27,862
Transfer agent and filing fees 12,953 5,012
Office rent 9,082 9,510
Finance fees 5,067 29,453
Entertainment and promotion 1,982 6,873
Amortization 1,102 1,143
Loss on disposal of capital assets - 4,576
---------- ----------
772,567 662,396
---------- ----------
Other (Income) Expense:
Interest income (5,925) (761)
Interest expense 54,541 14,215
---------- ----------
48,616 13,454
---------- ----------
Loss for the Period $ 821,183 $ 675,850
========== ==========
Loss Per Common Share $ 0.14 $ 0.12
========== ==========
Weighted Average Number of Common Shares
Outstanding 6,012,344 5,506,981
========== ==========
- See Accompanying Notes -
Idaho Consolidated Metals Corp. Statement 4
Interim Statement of Cash Flows
For the Nine Months Ended 30 September
U.S. Funds
Unaudited - See Notice to Reader
1996 1995
---------- ----------
Cash Resources Provided By (Used In):
Operating Activities:
Loss for the period $ (821,183) $ (675,850)
Items not affecting cash
Amortization 1,102 1,143
Loss on disposal of capital assets - 4,576
Release of escrowed shares for
executive compensation 351,685 294,375
Changes in current assets and
liabilities:
Accounts receivable (40,762) 2,217
Inventory (40,000) (25,000)
Prepaid expenses - 2,176
Accounts payable:
Related parties (38,354) (155,215)
Other (21,468) 77,853
---------- ----------
Net cash used in operating
activities (608,980) (473,725)
---------- ----------
Investing Activities:
Property rights, plant and equipment (339,161) (395,288)
Capital assets (6,963) -
---------- ----------
Net cash used in investing
activities (346,124) (395,288)
---------- ----------
Financing Activities:
Bank loan (5,000) -
Repayments of notes payable (140,016) (65,000)
Net proceeds from sale of common
stock 1,819,030 502,596
Share capital issued for non-cash
consideration (351,685) -
Share subscriptions payable - 340,200
---------- ----------
Net cash provided by financing
activities 1,322,329 777,796
---------- ----------
Net Increase (Decrease) in Cash 367,225 (91,217)
Cash position - Beginning of period 167,301 101,441
---------- ----------
Cash Position - End of Period $ 534,526 $ 10,224
========== ==========
- See Accompanying Notes -
Idaho Consolidated Metals Corp. Schedule
Interim Schedule of Resource Property Costs
For the Nine Months Ended 30 September
U.S. Funds
Unaudited - See Notice to Reader
1996 1995
---------- ----------
Direct - Mineral:
Idaho County, Idaho, U.S.A.:
Staking, filing and claim rental $ 154,299 $ 105,213
Process plant and equipment 103,807 127,519
Acquisition, lease and advance
royalties 94,400 41,200
Camp and general 35,054 20,259
Geological 30,313 55,129
Assaying 13,442 13,044
Drilling 2,032 -
Taxes and licenses 1,459 45,488
Environmental 180 -
Stripping - 31,345
Survey - 1,916
Option payment received (50,000) -
---------- ----------
Costs for the Period 384,986 441,113
Balance - Beginning of period 3,916,086 3,300,308
---------- ----------
Balance - End of Period $4,301,072 $3,741,421
========== ==========
- See Accompanying Notes -
Idaho Consolidated Metals Corp.
Notes to Interim Financial Statements
30 September 1996
U.S. Funds
Unaudited - See Notice to Reader
1. Significant Accounting Policies
The notes to the financial statements as of 31 December 1995, as
set forth in the company's 1995 Annual Report on Form 10-K,
substantially apply to these interim financial statements and are
not repeated here.
2. Interim Financial Statements Adjustments
The financial information given in the accompanying unaudited
interim financial statements reflects all adjustments which are,
in the opinion of management, necessary to a fair statement of the
results for the interim periods reported. All such adjustments
are of a normal recurring nature. All financial statements
presented herein are unaudited.
SCHEDULE B Page 1 of 2
1. YEAR-TO-DATE REQUIREMENTS
a) Deferred costs, exploration and development:
See attached Schedule for details.
b) General and administrative:
See attached interim financial statements for details.
c) Expenditures to non-arms length parties:
U.S. Funds
----------
Paid management fees and salary to president
and director $25,753
Paid management fees to directors 3,464
-------
$29,217
=======
2. FOR THE QUARTER ENDED 30 SEPTEMBER 1996
a) Securities issued:
Total Net
Type of Proceeds Type of Proceeds
Date Security Type of Issue Number Price U.S. Funds Consideration Commission U.S.Funds
------------- -------- ----------------- --------- ----- ---------- ------------- ---------- ----------
12 Sept. 1996 Common Private placement 337,800 $1.50 $ 506,700 Cash None $ 506,700
12 Sept. 1996 Common Private placement 100,000 $1.50 150,000 Cash None 150,000
12 Sept. 1996 Common Private placement 755,900 $1.75 1,322,825 Cash $45,000 1,277,825
--------- ---------- ----------
1,193,700 $1,979,525 $1,934,525
========= ========== ==========
b) Options granted:
NONE
3. AS AT 30 SEPTEMBER 1996
a) Authorized and issued share capital:
Authorized Issued
----------
U.S. Funds
Class Par Value Number Number Amount
------ ---------------- ---------- ----------
Common N.P.V. 20,000,000 $6,854,208 $7,421,177
b) Summary of options, warrants and convertible securities
outstanding:
Price CND
Date Granted Number Type Name Funds Expiry Date
--------------- ------- -------- ----------- ----- ---------------
Options:
30 October 1995 60,000 Director D.W. Steiner $1.80 30 October 1999
30 October 1995 50,000 Director E.R. Knickel $1.80 30 October 1999
30 October 1995 30,000 Director P. Lepik $1.80 30 October 1999
30 October 1995 50,000 Employee W. Struck $1.80 30 October 1999
30 October 1995 30,000 Employee G. Magnuson $1.80 30 October 1999
17 May 1996 250,000 Employee K. Scott $3.30 17 May 2000
17 May 1996 75,000 Employee T. Weed $3.30 17 May 2000
-------
545,000
=======
Warrants:
12 September 1996 268,900 $1.50 12 September 1997
or $2.50 12 September 1998
12 September 1996 377,950 $1.75 12 September 1997
------- or $2.75 12 September 1998
646,850
=======
c) Shares in escrow or subject to pooling:
562,500 common shares
d) List of directors:
D.W. Steiner
E.R. Knickel
G. Webster
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
------------------------------------------------------------------
(Dollar references are in U.S. dollars, unless otherwise specified.)
This Report on Form 10-QSB contains forward-looking statements. A
forward-looking statement may contain words such as "will continue to
be," "will be," "continue to," "expect to," "anticipates that," "to
be," or "can impact." Management cautions that forward-looking
statements are subject to risks and uncertainties that could cause the
Company's actual results to differ materially from those projected in
forward-looking statements.
RESULTS OF OPERATION
Quarter ended September 30, 1996 compared with the quarter ended
September 30, 1995.
The Company is in the exploration stage and has yet to generate
revenue from production. The Company continues to explore its mineral
properties in an effort to establish proven economic ore reserves.
Activities at the Eckert Hill plant were suspended during the quarter
while the Company interviewed for the position of metallurgist. The
metallurgist was hired in November 1996 and will be responsible for
finalization of the design, construction and start-up of the plant.
Operations at the facility also remain temporarily suspended as a
result of a legal action commenced against the Company in October 1996
by the operator of the facility. The legal action was commenced by
Mr. Joe Swisher and Idaho Mining and Development Company and alleges
substantial amounts owing to the plaintiffs in excess of amounts
accrued within the audited accounts of the Company. The Company
intends to honor all amounts properly accrued as owing to the
plaintiffs but will vigorously defend against the additional amounts
claimed. The Company has filed an action against Mr. Joe Swisher and
Silver Crystal Mines, Inc. for breach of contract on the Eckert Hill
plant, slander of title and restoration of all property and equipment
of the Company. The Company also is seeking an injunction to prevent
Mr. Swisher and Silver Crystal Mines, Inc. from using the Swisher-Br
process, a precious metals extraction process over which the Company
has an exclusive-use license. Once reactivated, the Eckert Hill
facility will remain a pilot plant until sufficient ore reserves and
gold concentrates are realized to take the facility into full
production.
During the quarter ended September 30, 1996, the Company completed
closing agreements with Idaho Gold Corporation, a subsidiary of Bema
Gold Corporation, to acquire the Buffalo Gulch , Deadwood and Friday
properties. The Company is currently conducting a 10-hole large
diameter diamond drill coring program on the Buffalo Gulch property as
recommended in a feasibility study authored by Mineral Resources
Development Incorporated which was updated in July 1996. The
preliminary indications are encouraging and the Company is proceeding
with reactivating permits towards putting Buffalo Gulch into
production by the fall of 1997. The Company's joint venture with
Cyprus-Amax on the Petsite and Golden Eagle properties is proceeding
well with the completion of an extensive geochemical soil sampling
program which has delineated a potentially large gold anomaly. Based
on the results, Cyprus-Amax redirected additional funds to conduct a
second phase of drilling on the properties. Cyprus-Amax also is
conducting a geochemical orientation survey on the Deadwood property
and has indicated an interest in participating in a joint venture to
further explore and develop this property.
In the third quarter of 1996, general and administrative expenses
increased by $277,884 to $350,292 as compared to $122,408 in the third
quarter of 1995. The increase brings total general and administrative
expenses to $772,567 at September 30, 1996 as compared to $662,396 at
September 30, 1995. The increase was mainly due to $179,712 in
executive compensation expense for the third quarter of 1996 as
compared to $Nil in the third quarter of 1995 as a result of an
increase in qualifying exploration and development expenditures in the
quarter as compared to the prior year when sufficient qualifying
expenditures had been completed by June 30 to maximize the release of
shares from escrow for that year.
Under U.S. generally accepted accounting principles, the Company must
record executive remuneration on the release of performance shares
from escrow. The Company issued 750,000 shares at the time of its
initial public offering to the original principal founders of the
Company at a price of $0.01 CDN. per share, subject to the terms of an
escrow agreement. The number of shares released from escrow is
calculated on an annual basis as the Company expends qualifying
amounts on its exploration and development programs, and the Company
must seek regulatory approval for each release. During the third
quarter of 1996, the Company expended sufficient amounts on
exploration and development to qualify for a release of 76,800 shares,
which results in $179,712 of executive remuneration and a
corresponding $179,172 increase in share capital. By the second
quarter of 1995, the Company had expended sufficient amounts to
qualify for the maximum number of shares which could be released in
that year, and accordingly no further amounts were calculated in the
third quarter of 1995. The executive remuneration is a deemed amount
and is based upon the fair market value of the Company's common shares
during the relevant quarter. Regulatory approval of this release has
yet to be obtained.
During the quarter ended September 30, 1996, the Company expended
$291,341 ($384,986 for the nine months to September 30, 1996) on its
resource property exploration, development and acquisition program as
compared to $202,187 ($441,113 for the nine months to September 30,
1995) in the third quarter of 1995. The overall decrease is related
to reduced exploration and development activities as the Company seeks
to obtain sufficient financing to continue its programs. The
expenditures during the third quarter of 1996 were mainly related to
claim maintenance and administration costs, the payment of $50,000 to
Idaho Mining and Development Company on an option to increase the
Company's interest in the Golden Eagle properties from 60% to 100%,
and minor exploration costs.
All of the Company's resource properties continue to be explored on
the basis of independent engineering report recommendations, and a
determination as to whether the properties contain proved reserves has
yet to be made. Management has obtained independent valuations of the
various resource properties and presently believes no write down to
net realizable value is required on any of the properties.
In 1994, the Company challenged the 1993 introduction of the claim
rental fees system by the BLM and requested a waiver of those fees
which would amount to approximately $460,000 for 1993 and 1994. The
request for waiver was denied by the BLM, and the Company then
appealed that decision to the United States Department of the
Interior, which denied the appeal. Management identified
approximately 1,700 peripheral claims which were dropped as a result
of the decision because they do not unduly affect the status of each
claim block. The key claims in each claim block have been maintained,
and accordingly an accrual of $229,125 has been made in the financial
statements comprised of $61,100 for each of 1993 to 1995 and $15,275
for each of the quarters ended March 31, 1996, June 30, 1996 and
September 30, 1996, representing the approximate amount of claim
rental fees which are owing to the BLM.
The net loss for the nine months to September 30, 1996 increased to
$821,183 ($0.14 per share) from $675,850 ($0.12 per share) for the
nine months to September 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company anticipates, based on currently proposed plans and
assumptions relating to its operations and exploration activities,
that the proceeds of private placements and the exercise of stock
options during the ensuing year will be sufficient to satisfy the
Company's contemplated cash requirements for the ensuing 12 month
period. The Company has also signed a letter of engagement with
Whalen Beliveau of Toronto, Canada to participate in a financial
advisory role to locate sufficient funding to finance capital
expenditures on the construction of the Buffalo Gulch Mine and other
Company projects. The Eckert Hill Property in Idaho and its related
process plant will require approximately $450,000 for commissioning of
the process plant for bulk sample testing and for the related
geological expenditures and feasibility studies. The Bema Properties
will require approximately $250,000 for permitting and an initial
exploration program. The Company estimates a cash requirement of
approximately $300,000 on the Mineral Zone and other properties for
claim rental fees and general exploration programs. The Company
requires approximately $480,000 for general and administrative
expenditures for the ensuing 12 month period, $529,906 for payments on
its notes payable and approximately $85,000 related to the proposed
application to another stock exchange for listing and market making
expenses. The remaining proceeds of private placements and the
exercise of stock options will be reserved for general working capital
purposes to reduce current liabilities.
The Company has notes payable of $529,906 due in the next year. The
Company anticipates repayment of these notes from the proceeds of
outstanding stock purchase warrants and the exercise of stock options.
The Company expects to fund exploration of the Petsite and Golden
Eagle properties through its joint venture with Cyprus under which
Cyprus has been granted an option to earn a 70% working interest in
the properties. The Company is also in discussions to obtain joint
venture partners on certain of its other properties.
As at September 30, 1996, the Company has a working capital deficiency
of $388,368. The Company anticipates improvement of this deficiency
from the exercise of warrants from recent private placements and the
exercise of stock options during the ensuing year. The Company may
also seek a debt restriction plan with its current debt holders and
seek additional private placement funding during 1996/97 in order to
correct this deficiency.
The Company is dependent on the proceeds of private placements and the
exercise of stock options to fund its general and administrative
expenditures and its mineral exploration and development costs.
Without such proceeds, the Company may not continue as a going
concern. The Company anticipates revenue to be generated during 1997
from the processing of ores through its Eckert Hill facility. The
amount of positive cash flows, if any, from such production of ores at
the Eckert Hill facility cannot be reasonably estimated, and
accordingly the Company will be required to rely on the sale of
securities or on a possible joint venture partner for its required
funding. The Company will need further funds to continue its
operations, and there is no reasonable assurance that such funding
will be available.
As at September 30, 1996, the Company had a working capital deficiency
of $388,368 as compared to deficiency of $1,172,834 at September 30,
1995.
Cash flows generated from the financing activities of the Company were
recorded at the periods ended September 30, 1996 and 1995 of
$1,322,329 and $777,796 respectively. The long-term debt increased to
$20,078 at September 30, 1996 from $Nil at September 30, 1995 and
current liabilities decreased to $1,172,310 at September 30, 1996 from
$1,307,837 at September 30, 1995. The Company has also issued
1,193,700 shares from treasury in the third quarter of 1996 on the
completion of three private placements which netted the treasury
$1,934,525. The related cash for these subscriptions was raised
during 1995 and 1996 and included in current liabilities at
September 30, 1995 was $340,200 related to these private placements.
The private placements allow the holders of share purchase warrants to
purchase an additional 377,950 common shares for $1.75 U.S. to
September 12, 1997 or at $2.75 to September 12, 1998 and an additional
268,900 common shares for $1.50 per share to September 12, 997 or at
$2.50 to September 12, 1998. Of the September 30, 1996 current
liabilities, $229,125 represents accrued claim rental fees, $529,906
represents the current portion of notes payable to shareholders and
$304,352 are amounts payable to various related parties. The balance
of current liabilities consists of accrued liabilities, a bank loan in
the amount of $30,408 and trade accounts payable. Legal fees
represent a significant portion of these unpaid trade accounts
payable.
The Company is considering reincorporating in the State of Wyoming,
U.S.A. which, if completed, could impair the Company's ability to use
Canadian net operating loss carryforwards and could result in certain
Canadian exit taxes.
Negative cash flows from operating activities were recorded for the
periods ended September 30, 1996 and 1995 of ($608,980) and ($473,725)
respectively. The Company will continue recording negative cash flows
from operating activities unless significant revenue is generated from
ore production. This continued negative cash flow will have a
material negative impact on liquidity.
Investing activities consist of funds being expended on resource
properties. The net cash expended on investing activities decreased
to $346,124 to September 30, 1996 from $395,288 to September 30, 1995.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
------------------------------
On October 18, 1996, Joe Swisher and Idaho Mining and Development
Company, a company controlled by Mr. Swisher, who together hold more
than ten percent (10%) of the outstanding shares of the Company, filed
a complaint for damages against the Company in the Idaho State Court,
County of Kootenai. The suit alleges, inter alia, that the Company
has breached certain contracts in which the Company acquired assets
from plaintiffs and that the Company owes monies on certain promissory
notes issued by the Company in connection with those acquisitions.
(See the Company's Form 10-KSB for the period ended December 31, 1994,
"Description of Business," regarding these acquisitions.) Plaintiffs
seek compensatory damages in the form of money and/or shares of the
Company.
On October 22, 1996, the Company filed a separate action in the Idaho
State Court, County of Nez Pierce, against Swisher and another company
controlled by him, Silver Crystal Mines, Inc., alleging, inter alia,
breach of contract to build facilities on the Company's land,
conversion of assets and slander of title relating to the Company's
exclusive licenses to the Swisher-Br Process. (See the Company's Form
10-KSB for the period ended December 31, 1995, "Description of
Business," regarding the Company's acquisition of the Swisher-Br
Process.) The Company seeks injunctive relief and compensatory
damages for the above-mentioned conduct.
The Company intends to vigorously defend and prosecute the above-
mentioned actions, but the expense of the actions and uncertainty of
litigation could have a material negative impact on the Company.
ITEM 2. CHANGES IN SECURITIES -- Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES -- Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -- Not
applicable.
ITEM 5. OTHER INFORMATION -- Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are attached to the Company's
Form 10-QSB for the quarter ending September 30, 1996:
10.5 Black Bear Option Agreement dated August 1,1996
27 Financial Data Schedule
(b) There were no reports on Form 8-K filed during the third
quarter ending September 30, 1996.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
IDAHO CONSOLIDATED METALS CORP.
DATED: November 19, 1996
By: /s/ Delbert W. Steiner
-------------------------------------
Delbert W. Steiner
President and Chief Executive Officer
DATED: November 19, 1996
By: /s/ Kenneth A. Scott
-------------------------------------
Kenneth A. Scott
Chief Financial Officer